W.he wanted to know how things are going with German companies, he just had to look at the Dax on Wednesday. It was deep red. Almost every company in the German leading index spent the trading day in the red.
The news of the imminent renewed lockdown caused deep uncertainty. Delivery Hero alone grew strongly – a food delivery company without a profit was the only hope for investors!
Although individual values turned slightly into positive during the day, the downward trend is obvious. The Dax even broke the psychologically important mark of 12,000 points. That is the lowest level since June this year.
It’s not just Corona that worries investors
The stock market is now realizing that this pandemic could be more persistent than many – especially in the markets – had expected. And the bad news is: the pandemic is having a much deeper impact; it has long been affecting not only companies that are directly attached to consumer spending. TUI and Lufthansa, they were and are the most immediate losers of the Corona crisis. Short-time work means less money in the wallet of the consumer, lavish vacations are almost impossible due to countless risk areas.
Now the crisis is leaping forcefully into business customer business. The gloomy prospects for SAP at the beginning of the week were harbingers. The customers’ business models are clearly under so much pressure that even Germany’s only world-class technology company has to adapt its strategy. He will not be an exception.
Further support is near. Federal Finance Minister Olaf Scholz will have to open the cash box again in order to mitigate further sales losses. Anything else would be the certain death of many companies.
And even if we don’t know today who will win the race for president, an aid package has been set for the American economy. Whether Trump or Biden, there will be further fiscal policy impulses. This will give the deeply insecure markets some hope, for now. However, the side effects and disincentives of government checkbook policy will also increase. That too is cause for concern.